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Inside Washington (07/23/2009)
* WASHINGTON (7/24/09)--The House Financial Services Committee Thursday approved changes to the government’s Section 8 housing program that provides rental housing assistance to about two million low-income families nationwide. The committee voted 41-24 in favor of H.R. 3045, the Section Eight Voucher Reform Act. The bill is intended to provide greater program flexibility, as well as streamline the process of providing Section 8 housing assistance. The measure was sponsored by Rep. Maxine Waters (D-Calif.). … * WASHINGTON (7/24/09)--President Barack Obama’s plan to revamp the financial regulatory system is losing steam, according to some financial observers. Critics of the plan say that the administration and policymakers are taking on too much--including revamping health care, energy and financials. Industry representatives also continue to oppose the creation of a consumer protection agency. On Tuesday, Rep. Barney Frank (D-Mass.) said he is surprised by the industry’s opposition to such an agency, but he said the agency should be a high priority (American Banker July 23). Lawmakers also are backing a proposal that would give systemic risk oversight to several regulators. The Senate Banking Committee was slated Thursday to consider the plan, which could allow the Federal Reserve Board, the Treasury Department, the Federal Deposit Insurance Corp. and other regulators to share the systemic risk responsibility. The proposal aims to prevent failures such as the American International Group Inc. failure, which cost the government more than $182 billion (Bloomberg July 23) ... * WASHINGTON (7/24/09)--Elizabeth Warren, chairman of an oversight panel for the Troubled Asset Relief Program (TARP), says the Treasury Department needs to charge more for bank stock warrants. The higher prices would benefit taxpayers but would not help banks trying to buy back their warrants after repaying TARP funds (American Banker July 23). If the warrants had been sold at market value, taxpayers would have received $10 million more,” Warren said. She acknowledged that the Treasury is more aggressively pricing the warrants. Her comments come after U.S. Bancorp and Goldman Sachs announced they would pay back their warrants. Goldman Sachs said it would pay the full proposed price of $1.1 billion, and U.S. Bancorp agreed to pay $139 million for the warrants. Goldman Sachs’ payback is at market rate, and U.S. Bancorp’s is higher than the estimated market rate ... * WASHINGTON (7/24/09)--Congress should consider the merits of assigning a systemic risk regulator with responsibility for overseeing systemwide leverage, and assess the extent to which reforms under Basel II will address risk evaluation and regulatory oversight concerns associated with advanced modeling approaches for capital adequacy purposes, said the Government Accountability Office (GAO) in a recent report. Basel II is a risk-based capital framework. The planned U.S. implementation of Basel II would increase reliance on risk models for determining capital needs for certain large institutions and regulators have not assessed if the Basel II reforms would address the concerns. “Such an assessment is critical,” the GAO said. World Council of Credit Unions (WOCCU) President/CEO Pete Crear has told the Basel Committee on Banking Supervision that credit unions “should not be penalized by tougher capital requirements than those faced by larger, riskier institutions that present systemic risk to the global financial system.” (News Now April 24) ... * WASHINGTON (7/24/09)--The U.S. Small Business Administration (SBA) on Thursday published in the Federal Register an interim final rule that will double the current amount of its surety bond guarantee on federal contracts to $10 million, effective Sept. 10, 2010. Current rules allow the SBA to guarantee up to $5 million of bonds related to public and private contracts and subcontracts. In a statement accompanying the release, SBA Administrator Karen Mills said that increasing the surety bond limit was a “critical step in making sure small businesses in the construction and service sector have access to federal contracting opportunities” that are crucial to economic recovery …


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